The COVID-19 storm has ushered in a number of new trends, including work-from-home, learn-at-home, dine-at-home and play-at-home, to name a few. This forceful isolation has taken a toll on the mental health of people, giving rise to the dire need to findcomfort and companionship. With little or no scope for socializing due to the current situation, people are increasingly indulging in pet adoptions to fight the emotional stress. As a result, demand for pet foods and snacks hasbeen at an all-time high overthe past few months.
Evidently, the pet industry was quick to respond to this new-found need for furry partners. Pet food manufacturers and retailers are making sure there are enough pet food supplies in stores. Most manufacturing facilities are operating at or near full-production capacity in a bid to meet the growing demand for fresh and healthier pet food. The pet food market is expected to rake in almost $31 billion in sales by the end of 2020, per Packaged Facts.
Like the rest of the retail segments, the pet industry witnessed a shift in consumers’ shopping preference to online portals amid the pandemic. This resulted in greater availability of pet products online along with the added facility of connecting consumers to veterinarians and other professionals through tele-health options.Per sources, online spending on pets was the highest for the month of April and has remained solid since then. According to Packaged Facts, in 2020, online sales are expected to contribute 27% to total sales in the pet space.
Given the rising interest in pet adoption, several companies have been looking to grab a share of the lucrative pet industry by bumping up investments. Leading the race in this sphereis Amazon AMZN. The Zacks Rank #3 (Hold) company is selling pet medicines at its 1-800-PetMed site at a whopping discount.
Another company looking to make a fortune with its pet products is Tractor Supply Company TSCO. The company recently expanded its pet product line with the addition of VICTOR Super Premium Pet Food (“VICTOR”) brand to its quality dog food range. This follows the introduction of VICTOR’s top-performing products, Hi-Pro Plus, to all stores in July. This makes Tractor Supply the first retailer in the United States to feature a diverse range of formulas within the dog food product line. Notably, VICTOR Super Premium Pet Food is one of the best dry foods for dogs, providing a complete and balanced diet. The introduction of this renowned brand in its dog food line highlights this Zacks Rank #3 (Hold) stock’s efforts to capitalize on the recent spike in pet adoption.
Procter & Gamble PG has also been upping its pet business game with pet care products such as shedding, cat litter, etc. This Zacks Rank #3 company’s brand Bounce Pet recently collaborated with North Shore Animal League America to provide pet owners with improved shedding facilities for their pets. This helps keep pet hair away from clothes, giving more reasons for pet lovers to cuddle their furry friends.
General Mills GIS has also made its presence felt in the pet and animal businesses following the acquisition of Blue Buffalo Pet Products. Notably, Blue Buffalo manufactures and markets wholesome natural pet food items, which are contributing meaningfully to this Zacks Rank #2 (Buy) company’s top line.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Colgate-Palmolive’s CL initiative to offer home delivery of Hill’s products comes as a boon for pet parents as they can now purchase prescription diet products directly from their veterinarian. Notably, the brand boasts an exclusive Healthy Advantage product line, which along with its Prescription Diet and Science Diet lines,is often suggested by veterinary professionals for animals with certain health problems. We note that the company has a Zacks Rank #3.
Chewy CHWY has been gaining from this sudden spike in pet ownership and the ongoing online retail trend. Topping it, this Zacks Rank #3 company’s subscription-based model lends it an edge over several other pet retailers.
The Clorox Company CLX is one company which is benefitting from the surge in demand for cat litter products. In response to this, the Zacks Rank #3 company intends to launch a new cat litter manufacturing facility at Tabler Station Business Park to support brands such as Fresh Step and Scoop Away.
Amid the COVID-19 related chaos, the pet category has emerged as a lucrative investment avenue for companies dealing in pet food, non-food pet supplies, veterinary services and non-medical services. Moreover, the pet industry, which is considered recession-resistant, is likely to grow more competitive as evident from the sudden spike in pet ownership and elevated spending on pet products. In fact, the U.S. pet market is expected to reach a worth of almost $99 billion by 2020, per Fortunly.
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ColgatePalmolive Company (CL) : Free Stock Analysis Report
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